The respondent had been assigned the work of remodelling and extension of Salaiaza Channel and construction of a sub-surface weir at For Standeman during the year, 1959-60. As a result of dispute on the items of work hereafter mentioned the respondent requested for a decision through arbitrator and the concerned Secretary of the Government acceding to such request appointed Mr. A. M. Hisbani, the then Superintending Engineer, Irrigation Circle, Kalat as the sole arbitrator :---- (1)Payment of plastering over concrete channel.
(2)Payment of 5 % protection charges on the net amounts of the bills.The cost of Items Nos. 1 to 4 works out to Rs.
1,52,000 (3)Payment of work done but not measured.
(4)Payment of 6 % interest.
(5)Material issued to the contractor.- The contractor states that 500 cwt. cement issued on one indent by Hasir Hussain Shah Overseer was not received by his genuine representative and as such the recovery of its cost from the contractor was not justified. The Department agreed to look into the case and the contractor also does not insist on its arbitration by the undersigned.
(6)Dewatering and wetness allowance. In was observed by the Deputy Chief Engineer, Irrigation, Quetta vide his No. 180-82/C, dated 4- -8-1960 after inspection of the site that dewatering and wetness allowance should be con--sidered. The department contends that it is impossible to say at this belated stage with any degree of definiteness whether there was any depart--mental contribution as regards de- -watering arrangements and has further agreed to look into the matter and decide on its merits.
There is no clause in the Agreement specifying that the dewatering arrangement was the responsibility of the contractor. The Department should, therefore, have either borne the entire expenses of dewatering or paid the rate of dewatering in case it was done by the contractor, 1, therefore, withhold arbitration on this point."
2. Mr. Hisbani gave his award on first four items on 3rd October, 1970 and worked out the respondent's dues on these items to Rs. 1,52,000. Sub--sequently the Department paid this amount to the respondent, hence the dispute is now confined to Items Nos. 5 and 6 which had not been finally adjudicated upon by Mr. Hisbani. It is, however, evident from his observa--tions on these two items that he found the claim just and proper, but as the final word on these items required some more investigation, he refrained from giving the award.
On 16th February, 1971. The respondent applied to the District Judge, Quetta to direct the Arbitrator to file his award and make the same the rule of the Court. The District Judge required the parties to attend the Court. The arbitrator filed the award as required. The appellant raised objections to the acceptability of the award mainly on the ground that the arbitrator having failed to give decision on Items Nos. 5 and 6, the award was not complete and deserved rejection. With regard to the arbitrator's observations on Item No. 6 the respondent stated that as the Department had disregarded the direction of the arbitrator, the Court may finalize it by directing the department to work out the payment due to him on this item through some independent technical person.
The District Judge in these circumstances remitted the award to the arbitrator with directions to give his award on these items within three months. But the arbitrator failed to submit the award within the prescribed, period hence the respondent requested the Court that the amount due to him from the Department be got determined through some technical person and decreed in his favour. This request was acceded to and one Mr. Ghulam Qadir was appointed to work out the amount payable to the respondent for these items of work.
It may be mentioned here that the decision on item No. 6 depended on certain technical calculations etc. And Mr. Ghulam Qadir was chosen for the task as he was a technical hand. Mr. Ghulam Qadir worked out the amount and submitted his report to the Court. Necessary notice was given to the parties by the Court after the filing of the report by Mr. Ghulam Qadir. The appellant's Department inter alia, raised the objections that (a) Mr. Hisbani having failed to submit his award within the prescribed period, the award had become void in entirety by mischief of section 16(3) of the Arbitration Act, and (b) the order of the District Judge dated 30th March, 1972, appointing Mr. Ghulam Qadir to determine the amount on Items Nos. 5 and 6 was also wanting in jurisdiction.
The District Judge vide his order dated 10th July, 1972 accepted these objections and held that the report of Mr. Ghulam Qadir had no legal sanction and could not, therefore, be looked into and also that the arbitrator having not submitted his award on the said two items within the prescribed time limit, his incomplete award was void under section 16(3) of the Arbitra--tion Act and likewise subsequent proceedings in the matter were also liable to be vitiated. Consequent upon this finding he refused to make the award rule of the Court.
3. This order was challenged by the respondent in the High Court through an appeal. But simultaneously he also approached the then Chief Minister for the settlement of the matter. In the meantime, the appellant Department had also directed the recovery of the amount paid to the respon--dent on the first four items by way of land revenue arrears on the ground that as the award had been nullified as a whole by the District Judge, the payment already made could not be retained by .The respondent. However, it appears that no serious steps were taken for the recovery as the Chief Minister used good offices to bring about a settlement and the parties agreed to the following arrangement :-
(a) The award of Mr. Hisbani shall be accepted on first four items.
(6) Items Nos. 5 and 6 shall be referred to a sole arbitrator and Malik Bashir Ahmed, the then Deputy Commissioner, Quetta was nominated the arbitrator by parties consent, and
(c) the respondent shall withdraw his appeal from the High Court.
4. In view of this arrangement the respondent withdraw his appeal from the High Court and submitted to the jurisdiction of the new arbitrator. Malik Bashir Ahmed gave his detailed award on 15th October, 19')4 after con--sidering the evidence led by the parties. He awarded a sum of Rs.
3,29,366 in favour of the respondent which included five per cent irrigation charges (Protection charges) calculated upon the amount found due for the work done by the respondent and six per cent. Per annum simple interest from the date of the completion of the work i.e. 30th June, 1963.
5. The respondent then applied to the District Judge, Quetta on 1st February, 1975 to direct the arbitrator to file his award in the Court and make the same rule of the Court. The matter was heard by the Senior Civil Judge on reference by the District Judge. Two specific objections were raised before him by the appellant, and I quote from his judgment :- "The respondents in their objections have stated that Malik Bashir Ahmed, Deputy Commissioner, Quetta was appointed sole arbitrator to examine and scrutinize the claim in respect of the following two items only.
(i) Material issued from Government store.
(ii) Dewatering and wetness allowance.
The arbitrator while giving his award has gone beyond the terms of reference by adding irrigation charges and had also given interest charges on the total amount as such he has acted beyond the scope of his arbitration therefore the whole award has become void in the eyes of law and also he has not discussed and assessed the evidence, in these circumstances the award given by Malik Bashir Ahmed, Deputy Commissioner, Quetta be declared void and beyond the jurisdiction of the arbitrator."
The appellant had stated in his objections that Malik Bashir Ahmed, the then Deputy Commissioner, Quetta was appointed the sole arbitrator to scrutinize and determine the claim in respect of the following two items only (1) material issued to the contractor, and (2) dewatering and wetness allowance ; but he exceeded the terms of reference. It was also objected to that the arbitrator while giving his award had gone further beyond the terms of reference by adding the irrigation charges and allowing interest on the total amount found payable to the respondent, as such, the award was challenged as unworthy of being made rule of the Court.
The pleadings of the parties gave rise to the following issues :-
(1) Whether the arbitrator has gone beyond the terms of reference? If so, to what effect? O. P. R.
(2) Whether the award be made rule of the Court. O. P. A.
(3) Whether the arbitrator has misconducted himself? O. P. R.
The Senior Civil Judge examined the arbitrator as well as an Executive Engineer posted at Fortsandeman at the relevant time, as appellant's witness. The arbitrator explained in his statement that by irrigation charges ht meant protection charges which were payable on the amounts due to the respondent from the Department under the terms of the contract as the work had been done in the tribal area. In fact such charges had been paid to the respondent on the first four items also upon which Mr. Hisbani had dilated and given award and which was also attached finality by appellant department subsequently when the then Chief Minister intervened and.
Allowed the respondent to retain the payment made to him as hereinbefore mentioned. On the point of interest from the date of the completion of the work his reply was not supported by any provision of law though on . Facts it was justified. The Executive Engineer did not produce before the Court the measurement book, daily diary report, and the log book etc. To which a reference is to be found in the said judgment, as the same were not available. However, this witness categorically stated that whatever record was available and produced before the arbitrator, was examined by him. The Senior Civil Judge, held that the award was made by the arbitrator after giving full opportunity to the parties of producing their evidence but at the same time it needed modification with regard to his finding on the interest charges, as that could only be awarded by the court under section 29 of the Arbitration Act. Subject to this modification he made the award rule of the Court anal passed a decree in the sure of Rs. 1,96,966, on 30th October, 1977 which is now the subject--- matter of this appeal.
6. The appellant feeling aggrieved by the said judgment and decree adopted a novel course to challenge it. He filed both a revision and appeal against a common order. By the former the decree of the Court was challenged and by the later the judgment was challenged and that too without paying full court-fee on the memo. Of appeal. Only a stamp of Rs. 2 wag affixed thereon. .
7. The legal position that the decree was the consequence or offshoot of the judgment and was not, as such, separable from the same, requiring challenge independently, was brought to the notice of the learned Assistant Advocate-General and he was asked to choose one of these rein--- -dies. He candidly conceded that the said course of action was adopted by the then Advocate- General due to some misunderstanding of law and requested to allow withdrawal of the revision.
The same was accordingly dismissed as not having been pressed. Now there is an imperfectly worded and in--sufficiently stamped appeal before me which assails only the judgment of the Senior Civil Judge, Quetta and not the decree. I would, however, treat it against both in the interest of justice. On the point of court-fee, the learned Assistant Advocate-General requested that fifteen days time may be allowed to him to make good the deficiency. Mr. Yahya Bakhtiar, learned counsel for the respondent, however, objected that the appeal shall only be maintainable after the full court-fee had been paid and at present it deserved dismissal on this short ground. He further argued that it shall in any case be a time-barred appeal, as the court-fee was being paid after a long delay. I did not, however, like to impede the course of justice by dismissing the appeal on such technical grounds, and exercising the powers vesting in me under section 149 of the Code of Civil Procedure, I allowed fifteen days time for the payment of full court-fee on 18th November, 1981, when the arguments were yet in progress. The court-fee was paid within the prescribed time limit, and I shall now proceed to decide the case on merits.
8. The appellant's learned counsel has assailed the validity of the impugned judgment on the ground that (1) award was vague and, as such, unacceptable, (2) that the earlier award of Mr. Hisbani and the report of Mr. Ghulam Qadir having been relied upon by the arbitrator in his award, the award was liable to be vitiated, (3) the award of protection charges and interest (already struck down by the Senior Civil Judge to the extent of the interest) was beyond the Scope of reference, therefore, the award was un--sustainable as a whole, (4) the appellant's evidence having not been considered and recorded and no finding having also been given on distinct and separate issues requiring decision in the case, the arbitrator had mis-conducted himself and made his award liable to be struck down. On all these scores he seeks setting aside of the award and the decree passed in persuance thereto by the Senior Civil Judge, Quetta.
The above-noted grounds are in fact broad bifurcation of two main issues which had been raised before the Senior Civil Judge also, namely (1) the mis--conduct on the part of the arbitrator, if any, and (2) the effect of the inclusion of interest and protection charges in the award. Accordingly I would deal with the appellant's many fold objections under these two broad heads.
9. Adverting to the first objection-that the arbitrator had misconducted himself' in that he did not reduce the parties evidence into writing ; separate issues were not dealt with 'and decided by giving separate findings which made the award vague, and the effect of considering the award of Mr. Hisbani and the report of Mr. Ghulam Qadir, I may first refer to the statement of Mr. Saleem, the appellant's witness. He has categorically stated that whatever record was available with the Department, had been submitted to the arbitrator for consideration and was examined. By him.
This statement provides conclusive answer to the objection with regard to the recording and consideration of the evidence. Then if concession of raising the ground that all evidence was not considered by the arbitrator was given for the first time at this stage, one cannot loose sight of the fact that . . . . . . . . Even at this belated stage the argument was being advanced without specifying the nature of the evidence which had been considered or was refused to be heard. Learned Assistant Advocate-General is unable to substantiate from the record as to what particular documentary of oral evidence was intended to be pro--duced and what steps were taken in that direction. In these circumstances, all what I can say is that it is an afterthought. Had the arbitrator refused to take into account any particular place of evidence, it was certainly incumbent upon the appellant to confront the arbitrator, while he was in the witness box; with those pieces of evidence or in the minimum, to have even made a suggestion to that effect. Nothing such is to be found in the cross--examination of the arbitrator. Next, if the counsel conducting the case in the lower Court had failed to perform his duty, at least the learned Assistant Advocate-General should have brought to my notice such evidence which he considered helpful in explaining his client's case, if at all, at earlier stages the case had not been conducted properly or the arbitrator had committed any irregularity. Nothing such having been done the contention raised by him is unsustainable in law. Their own witness's statement is sufficient to clinch the issue. This statement when read along with the arbitrator's statement that he examined all the evidence produced before him would further be sufficient to satisfy one that all the evidence was considered by the arbitrator.
I would be presently referring to the arbitrator's version also to give a perfect picture of what the record contains. In reply to a pointed question that he based his award on the judicially discarded award of Mr. Hisbani and the report of Mr. Ghulam Qadir, he stated without any mental reserva-- tions that he saw these reports but gave the award on the basis of the entire evidence which the parties chose to produce before him. In the factual aspect this statement is sufficient to inspire confidence in his award and, particularly to satisfy the expectations that one can legally have iii the extraordinary system of decision of disputes through arbitration.
10. Now coming to the point of the manner of enquiry, it is sufficient to say that an arbitrator is neither a Judicial Officer, nor is he to be equated, with a Court of law in the matter of the methodology to be adopted by him while conducting such proceeding. Arbitration is an extraordinary arrangement which the contesting parties mutually agree to adopt for the settlement of their disputes. The arbitrator, through whom the parties want decision of their dispute, may be a person conversant with or ignorant of law, technically trained on the subject in issue or a raw hand. The criterion, therefore, is to see whether the arbitrator's conduct was moraily above . Board and the way of attending to the dispute was diligent and honest and that the resultant award was intelligible. The form- or procedure of inquiry is hardly of consequence.
11. Next limb of the argument with regard to alleged misconduct was that the arbitrator based his award on the report of Mr. Ghulam Qadir and earlier award of Mr. Hisbani. The answer to this contention is also to be found in the statement of the arbitrator. He was asked if he based his award on these documents, to which he replied in the negative and explained that although he had gone through the said award and the report, buts had based his decision on the evidence led by the parties. Apparently there is no harm in going through the earlier documents dealing with the dispute. Moreover, the contention is vague. It is not the case of the appellant that the incomplete award on the disputed items made by, Mr. Hisbani had been copied in some respect and to that extent there was no independent application of mind by the arbitrator. As far as Mr. Ghulam Qadir's report is concerned, he had only calculated the amount and it is in no way an award. Looking to the technical calculations for the purpose of finding out the amount . Due to a party from the other does not amount to misconduct. Although the- learned Assistant Advocate-General did not say in what respect this report was relied upon, but at its height, only this much help could be derived from this cannot. Furthermore, no miscarriage of justice is either evident from the award or is alleged in specific terms, with reference to the said award and the report. Mr. Yahya Bakhtiar controverting this contention submitted that not only consultation of a technical report but also basing of opinion on an expert's report would not amount to misconduct ; and render the award defective. For this proposition, he finds support from the case of Muhammad Saghir Bhatti & Sons v. The Federation of Pakistan and another (PLD 1958 SC (Pak.) 221) and Durga Prasad Chamria and another v. Sewkishendas Bhattar and others (PLD 1949 P C 187and I agree with him.
12. Learned Assistant Advocate-General next contended that the award was not sustainable on the further ground that the evidence of the parties had not been reduced to writing by the arbitrator.
This objection is also without substance. It is consistent position of law, as explained among other authorities, in Gul Hasan Shah v. Sardali Shah and others (PLD 1960 Pesh. 14) that an arbitrator was not bound to reduce the evidence into writing and he could legally rely upon the oral evidence of the parties and their admissions. As' long as the conclusions drawn by the arbitrator are intelligible and confidence inspiring such objection would be of no consequence, as they have relevance to Court proceedings and not to an arbitration. Same is the position with the argument that the award was vague because separate decisions on all the issues had not been given. I need not repeat what I have said above, with regard to the nature of these proceedings.
13. Here I find it necessary to generally dilate upon the question as to what is a misconduct and a few words on the principles governing the Courts in the matter of acceptance and rejection of the awards. Section 30 of the Arbitration Act lays down that an award shall not be set aside except on the grounds enumerated therein, which include the ground of misconduct. "Misconduct" of an arbitrator has a reference to the conduct of the arbitrator which has a personal element in it. It may some times involve moral turpitude, misconduct of proceeding on the other hand means adoption of such procedure in the course of the arbitration proceedings which is either not warranted by the facts of the case or is opposed to the principles of justice. It implies the breach of duty and non-observance of the common rules of justice, the adoption of which is expected from a person of average prudence. Since the rules of procedure for an arbitration have not been laid down by Legislature, therefore, it has been consistently held by the superior Courts that an arbitrator was not bound to follow any particular procedure much less that of a Court of law.
Therefore, all what shall be seen in the wake of this extraordinary methodology of settlement of disputes is whether or not the arbitrator fully, sincerely and honestly applied his mind to all the aspects of the matter in issue and made the award remaining within the four corners of the reference. Though transgressing the limits of reference is also not by itself a ground, enough to vitiate the award, and in such an event, if the unwarranted part of the award was separable from the rest, such exercise would be complementary. And that was done in the instant case by the Senior Civil Judge when he separated the illegal part of this award dealing with the interest and struck it down and made the rest of the award rule of -the Court, This was perfectly a legal mode (See C. T. A. C. T. Chidambaram Chettfar v. C. T. A. C. T. Subramanian Chettiar and ,others AIR 1953 Mad. 492. In instant case no allegations of personal nature have been levelled against the arbitrator. The charge of misconduct was attempted to be supported on three counts, namely (i) not recording of evidence, and I need not reiterate what I have already said on the point ; (ii) consideration of two earlier documents of which one was the award and the other was a report and in that respect also I have said quite a few words ; and (iii) awarding of protection charges and interest. As to this -last objection. I would be adverting later, as it has nexus with the facts of the case. I may close the discussion on the point of misconduct by further explaining that the failure of an arbitrator to take into consideration a particular kind or piece of evidence was n too misconduct, if otherwise, the award was intelligible. (See Manzoor Hussain and others. v. Wali Muhammad and another (PLD 1962 Kar. 877Similarly taking into consider--ation of material including, even an unregistered document was not mis--conduct (See Durga Chamria and another v. Sewklshendas Bhattar and others). Admission of otherwise inadmissible evidence also did not amount to misconduct (See Vellor Municipal Corpn. Ltd. v. State of Madras (72 L W 307 == (1959) 1 M L J 318Failure to answer a particular issue distinctly and separately would also not be a misconduct (See Sm. Padmabati Paul and others v. Pannals Paul and others (AIR 1959 Cal. 10Non- reduction of evidence into writing was also not misconduct (See Gul Hassan Shah v. Sardali Shah and others.
It is also noteworthy that a party who did not raise a particular objection before the award had been given any voluntarily acquiesced to the arbitrator's jurisdiction was debarred from raising such objections at I later stages. (See Messrs Hajl Moosa Ismail & Co. v. Amin Agencies Ltd. (PLD 1955 Sind 242On all these scores, I do not find any substance in the allegation of mis--conduct levelled against the arbitrator in this case. Resultantly I do not find any illegality in the order of the Senior Civil Judge making the award rule of the Court and rejecting the objections raised before him by the appellant. Trivial points of non-framing of issues etc. As have been raised by the learned counsel for the appellant, and to which I have already made reference, and the form of the award etc. Are too fine and technical points to be able to disturb an award ; moreso, when such objections are not attached much of weight even in otherwise sophisticated Court proceedings, unless miscarriage of justice was evident from the face of the record.
14. Another important principle to which . Mr. Yahya Bakhtiar pointed out was that the Courts were not supposed to act as regular Courts of appear while examining the awards. This principle has been elaborated in Union of India v. N. P. Singh (AIR 1962 Cal. 594The reasons for this dictum are quite obvious.
The parties, when opt either in the contract or subsequently when the dispute has arisen to a decision through the arbitration rather than by a regular Court of law they wilfully opt out of the Court's normal methodology, based on strict and delicate procedural technicalities, and rather agree to a system much simpler than that of the Courts and which may appear also to be cruder in some cases, hence none of them can expect anything higher than what they have opted for by intermingling the principles of two distinct systems. The Courts examining the grievances of the parties with regard to arbitrations have to keep in view the criterion with which the arbitration proceedings are to be judged and not the standards of the Court proceedings.
15. The next objection to the award was. With regard to the interest that had been included in it and also with regard to the protection charges allowed by the arbitrator without there being a specific reference on these points. On both these grounds, specific reference was not necessary because they were matters collateral or inter-linked with the main issues. The question of awarding the interest depends upon arbitrator's appreciation of the fact that due to some illegal act on the part of one party the aggrieved party suffered uncalled for loss and was, therefore, entitled to compensation in the interest of even handed justice. However, in this case, the arbitrator could no A allow the interest from the date of the completion of the contract and to that extent the award was liable to be set aside and the Senior Civil Judge/ rightly did so. But instead of correcting the error and by exercising his own powers of awarding interest under section 29 of the Arbitration Act and awarding interest at an appropriate rate, so that the respondent who had suffered financial loss by the blocking of his money for twenty years or so, for no fault on his part and further considering the inflationary conditions which had reduced the money value which he was likely to get now comparing to twenty years back, he opted to keep quiet on the issue and that arms unjust.
As to the protection charges, it is enough to say that this was also not a separate issue. The protection charges were payable under the contract on all amounts due to the respondent under the contract. I need not go any further on this point than referring to the payment made to him in respect of Items Nos. 1 to 4, referred to above, in which protection charges were included. No objection was raised to the same and obviously for the reason that the contract made a provision in this respect. There is hardly any justification for the learned Assistant Advocate-General now to argue that such charges should not have been included in the amount awarded on the items under consideration of the arbitrator. Uniformity is to be maintained in respect of the contract and the arbitrator did not do anything more than this. There was also no need of a separate reference on thus point. And it was not done even at previous stage when issues requiring arbitration had been framed. Question in issue was the amount of money payable to the respondent on the said items, and protection charges were to be calculated and paid as an essential charge on the amount found due. There is thus no substance in this contention as well.
16. Lastly my attention was specifically invited, by Mr. Yahya Bakhtiar to the Senior Civil Judge's order wherein while holding that the arbitrator could not include the interest and striking it down he also kept silent to give effect to section 29 of the Arbitration Act. He pointed out that the amount due to the respondent had remained withheld for no fault of his for about twenty years and he deserved some compensation. Under section 29 of the Arbitration Act, the Court was empowered to allow interest at an appropriate rate from the date of the decree. Accordingly he argued that while rejecting the interest Art of the award for the reason that it could not be allowed from the date of the completion of the contract, he should have allowed it, at least, from tine date of the decree. The submission is well-founded. The respondent whose moneys remained blocked for about twenty years and has the value of money had considerably gone down comparing to the year ,1963, deserved at least to be marginally compensated. In all fairness. I would accordingly allow simple interest at the rate of 6% per annum from the date of decree in question and such amount shall be calculated and added to the decretal amount of Rs. 1,96,966. The decree shall accordingly be modified to this extent.
17. Before I part with the case, I may record; my appreciation for the valuable assistance provided by the learned counsel without which it would have been difficult for the to settle this long outstanding dispute giving rise to many complicated legal propositions.
The appeal is without any substance and is hereby dismissed with costs.